Commission approves office allocation at 48 Stockton to revive Union Square retail core

The Planning Commission voted unanimously on April 15 to approve a conditional use authorization and small-cap office allocation to convert the upper floors of the historic 48 Stockton building to office use, while preserving retail on the first two floors.

Strata Investment Group (sponsor) argued that Union Square’s multilevel retail market is weak, vacancy rates in the district had risen — citing a 13.6% overall retail vacancy in Q1 2021 — and that the building’s small floorplates, limited light wells and surrounding context make residential conversion difficult. “Retail demand for multilevel 30,000+ square-foot spaces is declining,” Clark Miller told the commission.

Staff recommended the conversion as a strategy to activate the corridor’s pedestrian experience and to finance elevator modernization and structural upgrades needed to make the building leasable. Karen Flood, executive director of the Union Square Business Improvement District, told commissioners the BID supports the proposal, saying office uses on upper floors will help generate foot traffic and aid retail recovery once tourism and transit return.

Commissioners discussed how the conversion fee and other programs could be used to improve public open space and support district revitalization, and asked staff for a broader strategy on reuse of upper-floor spaces in Union Square. The commission approved the CUA and office allocation unanimously 7–0.

The approval allows the sponsor to market Floors 3–6 as office, while retaining the option for the third floor to be configured with the lower retail for a single retail tenant if market conditions change.